AVAX Price Analysis: Native Token of Avalanche Appears to Be Making a U-Turn

AVAX, the native token of Avalanche, appears to be making a U-turn after a notable price decline in recent days. Like other major cryptocurrencies, AVAX is gaining

The price of AVAX, the native token of Avalanche, seems to be changing direction following a noticeable decline in recent days. Like other major cryptocurrencies, AVAX is getting attention from traders and investors because of a bullish pattern on the four-hour chart.

At the time of writing, the altcoin was trading at $34.60, showing a rise of over 3.05% in the last 24 hours. However, participation seemed to have dropped by 15% over the same period — a sign that traders and investors could be waiting for confirmation or a complete shift in sentiment.

Despite the decline in participation, traders showed strong interest in the asset, as reported by on-chain analytics firm Coinglass. In fact, data showed that AVAX’s Open Interest (OI) increased by 6.50% in the last 24 hours. The uptick in OI hinted at the formation or buildup of new positions on both long and short sides.

However, interest in altcoins cannot be limited to intraday traders. According to Coinglass, investors and long-term holders seemed to have started accumulating tokens as well.

The on-chain metric for spot inflow/outflow showed that exchanges saw outflows of AVAX worth $3.54 million in the last 24 hours. This could be seen as a sign of potential accumulation, which could drive buying pressure and further upside rallies.

All this bullish activity in AVAX has been driven by its strong price action.

According to AMBCrypto’s technical analysis, AVAX formed a bullish inverted head and shoulders pattern on the four-hour time frame. It seemed poised for a breakout, at press time.

This pattern is usually considered a bullish signal in trading and investing, with the price normally surging only after a successful breakout.

Based on the altcoin’s historical price momentum, if AVAX breaches the pattern and closes a four-hour candle above the $35-level, there is a strong possibility it could initially rise by 8.50% to hit $38. If sentiment remains unchanged, it could further soar by 25% to touch $41.50 in the future.

Despite the bullish outlook, however, AVAX was still trading below the 200 Exponential Moving Average (EMA) on the four-hour time frame, at press time. This indicated that it has remained on a downtrend. However, its Relative Strength Index (RSI) of 53 suggested that maybe, it has the potential to continue its rally in the coming days.